There is some good informtion about what will happen to GOLD during a deflation , especially Mish Shedlocks piece which goes into considerable detail....
Showing posts with label deflation gold. Show all posts
Showing posts with label deflation gold. Show all posts
Monday, May 30, 2011
Tuesday, September 9, 2008
World Deflation
Ignacio Merino 636
Santa Cruz
Miaflores, Peru
Phone: 001-51-56-973-5599
001-51-19-280-8796
Email: ebo@dtanalysis.com
Website: www.dowtheoryanalysis.com Worldwide Deflation
DAILY REPORT (9/08/08)
It appears that very few people realize that deflation is a worldwide phenomenon; the few that do believe deflation exists think it is confined to the United States. They are wrong. For years the US has had high inflation but offset it by importing deflation from places like China. China kept its currency abnormally low, or devalued it in terms of the US dollar, and that allowed the US to import cheaper goods. That is a deflationary pressure. China wasn’t the only country to play this game; most of Asia did the same thing. In the end though this pressure to produce and export finally drove the price of raw materials up into the clouds and everybody felt the sting. The US for their part did their best to keep the game going by blowing as many asset bubbles as they could: stocks, credit, housing, and finally commodities, all reached extreme valuations. No attempt was made to find equilibrium. In fact any attempt to find a meaningful balance was discouraged if not punished outright. The presence of a bubble was always denied until it had long since burst, and then meaningless commissions were formed to pass hollow laws that changed nothing. Then it was on to the next bubble du jour.
Santa Cruz
Miaflores, Peru
Phone: 001-51-56-973-5599
001-51-19-280-8796
Email: ebo@dtanalysis.com
Website: www.dowtheoryanalysis.com Worldwide Deflation
DAILY REPORT (9/08/08)
It appears that very few people realize that deflation is a worldwide phenomenon; the few that do believe deflation exists think it is confined to the United States. They are wrong. For years the US has had high inflation but offset it by importing deflation from places like China. China kept its currency abnormally low, or devalued it in terms of the US dollar, and that allowed the US to import cheaper goods. That is a deflationary pressure. China wasn’t the only country to play this game; most of Asia did the same thing. In the end though this pressure to produce and export finally drove the price of raw materials up into the clouds and everybody felt the sting. The US for their part did their best to keep the game going by blowing as many asset bubbles as they could: stocks, credit, housing, and finally commodities, all reached extreme valuations. No attempt was made to find equilibrium. In fact any attempt to find a meaningful balance was discouraged if not punished outright. The presence of a bubble was always denied until it had long since burst, and then meaningless commissions were formed to pass hollow laws that changed nothing. Then it was on to the next bubble du jour.
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